Carnival’s third quarter results were met with a negative market reaction despite outperforming Wall Street’s revenue and non-GAAP profit expectations. Management identified strong onboard spending, disciplined cost controls, and the impact of new destination offerings as primary drivers of performance. CEO Josh Weinstein cited “same ship yield improvement and its marked impact on the bottom line,” noting that operational execution allowed the company to deliver higher net income even with a year-over-year decline in passenger cruise days. Weinstein also highlighted robust demand for new experiences like Celebration Key and the company’s ability to manage costs, which helped offset headwinds from lower capacity.
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Carnival (CCL) Q3 CY2025 Highlights:
- Revenue: $8.15 billion vs analyst estimates of $8.11 billion (3.3% year-on-year growth, 0.5% beat)
- Adjusted EPS: $1.43 vs analyst estimates of $1.32 (8.5% beat)
- Adjusted EBITDA: $2.99 billion vs analyst estimates of $2.90 billion (36.7% margin, 3.2% beat)
- Management raised its full-year Adjusted EPS guidance to $2.14 at the midpoint, a 8.6% increase
- EBITDA guidance for the full year is $7.05 billion at the midpoint, above analyst estimates of $6.99 billion
- Operating Margin: 27.9%, in line with the same quarter last year
- Passenger Cruise Days: 27.5 million, down 600,000 year on year
- Market Capitalization: $37.23 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Carnival’s Q3 Earnings Call
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Robin Farley (UBS) asked about the pricing impact from Celebration Key. CEO Josh Weinstein explained that itineraries including the new destination are achieving a ticket price premium, although it is still early to quantify long-term effects.
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Brent Montour (Barclays) inquired about consumer behavior shifts and booking volatility. Weinstein responded that Carnival continues to see solid demand and no major trade-downs within its customer base, attributing this to limited capacity growth and a diversified brand portfolio.
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Steve Wieczynski (Stifel) pressed on headwinds for 2026 from loyalty program changes and dry dock expenses. Weinstein acknowledged these will impact yields but highlighted that efficiency gains and strong forward bookings should help mitigate pressures.
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Matthew Boss (JPMorgan) asked about the opportunity for further yield and margin improvement. Weinstein stated there is ample room for higher returns, and Bernstein emphasized ongoing savings initiatives and scale benefits as key to sustaining margin expansion.
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Lizzie Dove (Goldman Sachs Asset Management) questioned investment decisions between new ships and midlife refurbishments. Weinstein shared that the success of the AIDA evolution program is informing similar initiatives for other brands, focusing on maximizing returns from the existing fleet.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) the operational ramp and guest feedback from Celebration Key and Relax Away Hastings Quay, (2) the rollout and early impact of the Carnival Rewards loyalty program on both yields and guest retention, and (3) Carnival’s progress in executing brand-specific fleet upgrades and cost-saving initiatives. Developments in capital allocation, such as a formal return to dividends or share buybacks, will also be key milestones.
Carnival currently trades at $28.57, down from $30.62 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members).
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